Red-light district feels the pinch

Amsterdam’s red-light district seems not to be immune from the recession: sex shops are struggling, brothels are empty and prostitutes are being pursued for back taxes

IT’S SEEDY BUT relatively safe, which is why Amsterdam’s red-light district, one of the most popular sex-tourism haunts in the world, generates almost €1 billion a year. At least it used to. Now sex shops are struggling, brothels are becalmed, and the city authorities have started chasing registered prostitutes for backtaxes.

Not that you’d know it. On the surface, it’s business as usual in De Wallen, as it’s known in Dutch. On a sunny August evening, the network of alleys covering 6,500sq m of prime real estate in the oldest part of the centre is packed with tourists of all nationalities. The difference is that while punters may be looking, these days far fewer are parting with their cash.

Their newfound reluctance, it seems, has nothing to do with moral scruples. In a cash-strapped world of budget flights and budget hotels, it’s the economy, stupid.

Hanni Jagtman is a businesswoman who knows the Dutch sex industry inside out. In a world dominated by men – with a richly deserved reputation for gangsterism, people trafficking and violence – she opened her first sex shop and mail-order business, Mail and Female, in 1988, and has built a successful chain over the past 25 years. This is the worst slump she can remember.

“One of the reasons Amsterdam’s red-light district has survived is because of its economic value to the city; we should have no illusions about that,” Jagtman says. “And, just as other parts of the Dutch economy are being hit by the global downturn and the euro crisis, so is the sex business. It’s inevitable. I suppose this is the ultimate in discretionary spending – so we’re particularly exposed, so to speak.”

The recession, she believes, is a turning point for the industry. “It’s disastrous. It’s so serious that we must look at where we are going and decide where the future lies, or call it a day. Tastes have changed as well, so maybe in some ways we’ve failed to keep up with the times.”

As you might expect, Jagtman is not shy about spelling out the problem areas. “We have no control over the economy, but we have control over what we sell. Sales of sex toys, DVDs and edible underwear – it used to be a particularly big seller – are all down sharply as a result of tighter spending and competition from the internet.

“But, interestingly, what’s also changed in broader terms is the role played by women: we have taken more control over our own sexuality, and that has changed the nature of this business. Women are looking for quality products, so it’s no longer about men in raincoats looking for dirty books. That’s been a qualitative leap.”

Bizarrely, bureaucracy is having an impact too, potentially turning what used to be a largely underground, laissez-faire business into a far more tightly regulated industry.

With the Netherlands facing austerity cuts of €13 billion next year, it’s no surprise that the government is under pressure to generate income where it can. Tax officials are already focusing on Amsterdam’s 10,000 prostitutes and escorts, whose trade became legal in 2000 and a good proportion of whom are registered as self-employed businesswomen.

Officials are being detailed to tour the red-light district and hold “drop-in sessions” at which they brief workers on what they should be paying and, if necessary, help them to do the paperwork. In the past, sex workers have often been treated leniently, but from now on they’ll be expected to pay the minimum tax of 33 per cent of their earnings.

It’s all part of a modernised government policy on prostitution, which comes into effect on January 1st next year and will include Dutch-language tests to ensure that newcomers can support themselves (a strange logic, given that a high proportion of clients in Amsterdam are foreigners and that the default language for foreigners is English).

Brothel owners will also be required to be on the premises during opening hours. They must take visible measures to prevent unsafe sex, and they will have to keep rosters that show a ban on double shifts is being enforced. They say the new rules are bureaucracy gone mad, are politically driven by conservatives and the religious right, and will further damage the sex business economically.

Amsterdam’s mayor, Eberhard van der Laan, has a different view. “Prostitution is a vulnerable profession. It often involved an unequal power relationship between owners and prostitutes. We need to change that.”

Coalition Project 1012, named after the central-district postcode, is the city’s attempt to reclaim key streets from the red-light district, gentrify some of the rowdier enclaves and contain the criminal underbelly.

But the question ultimately is whether sex can be sold as a sanitised business – and, if it can, whether it will still generate enough money to make it worthwhile. As ever, it’s all about the bottom line.

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